NCPA - National Center for Policy Analysis


March 12, 2008

Big advances in technology have raised the costs of prosthetic limbs, and that has made them a target for cutbacks in health care coverage.

For example:

  • Many private health plans cap prosthesis coverage at $2,500 or $5,000 a year, or pay for just one device per limb in a lifetime, sometimes even for a growing child.
  • The most basic devices can cost between $3,000 and $15,000, while mechanically advanced or computer-assisted models can cost up to $40,000.

Now, amputees and prosthetic-device makers are pushing state legislatures around the country to pass laws that mandate prosthesis coverage.  The goal is to force private health plans to offer coverage comparable to that provided by Medicare, which pays at least 80 percent of the cost of prostheses and allows regular replacement of artificial limbs.  Health insurers oppose such mandates, saying they reduce consumer choice and drive up costs.

So far, eight states have passed laws mandating prosthetic coverage comparable to that offered by Medicare. 

Proponents of mandates point to the benefits of additional coverage:

  • They claim the coverage would cost just pennies in monthly premium increases, given that there are fewer than two million Americans living without a limb.
  • Equipping amputees with an artificial leg or arm that keeps them active and productive, they say, also prevents other medical costs and complications, such as back problems or obesity.

Reginald Jones, an attorney representing the Virginia Association of Health Plans, says small businesses bear the brunt of the cost of state insurance mandates, because most large-employer health plans are governed by federal law.  There's a tradeoff, says Jones.  It's probably more important to have more people insured with basic coverage and fewer uninsured, than a few people insured with a lot of coverage.

Source: Vanessa Fuhrmans, "Insurers Pressed To Pay More For Prostheses," Wall Street Journal, March 11, 2008.

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